Contract law (2022): Quasi-contractual obligations: Quantum meruit

Quantum meruit is a Latin phrase meaning "what one has earned". In the context of contract law, it means something along the lines of "reasonable value of services".

In the United States, the elements of quantum meruit are determined by state common law. For example, to state a claim for unjust enrichment in New York, a plaintiff must allege that (1) defendant was enriched; (2) the enrichment was at plaintiff's expense; and (3) the circumstances were such that equity and good conscience require defendants to make restitution.

Situations.

Quantum meruit is the measure of damages where an express contract is mutually modified by the implied agreement of the parties, or not completed. While there is often confusion between the concept of quantum meruit and that of "unjust enrichment" of one party at the expense of another, the two concepts are distinct.

The concept of quantum meruit applies in (but is not limited to) the following set of situations:

1. When a person hires another to do work, but an impeding act falling short of vitiating frustration/repudiation has occurred, such as access or intervening act of God, the worker may sue (or counter-sue) for the value of the improvements made/services rendered. The law implies a promise from the employer to the worker that they will pay them for their services, as much as they may deserve or merit.

The measure of value set forth in a contract is legally admissible as evidence of the value of the improvements or services but the court (or thus out of court settlement) is not required to use the contract's terms when calculating a quantum meruit award. (This is because the values set forth in the contract are rebuttable, meaning the one who ultimately may have to pay the award can contest the value of services set in the contract.)

2. When there is an express contract for a stipulated amount and mode of compensation for services, the plaintiff cannot abandon the contract and resort to an action for a quantum meruit on an implied assumpsit. However, if there is absence of any promised consideration, the plaintiff (such as hirer) has a right to elect to repudiate the contract and, failing a valid frustration, innocent mistake reason or similar defense, has the right to compensation from the defendant on a quantum meruit basis.